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Q2-2016: Dabur marketing spends up 9.9 percent

19 Nov, 2015 - 11:50 AM IST | By Tarachand Wanvari | 533 Reads

BENGALURU: Dabur India Limited (Dabur) spent 9.9 percent more year on year (YoY) towards advertising and publicity expenses (ASP) in the quarter ended September 30, 2015 (Q2-2016, current quarter) at Rs 278.42 crore (13.3 percent of Consolidated Net Sales or Total Income from Operations or TIO) as compared to Rs 253.35 crore (13.1 percent of TIO), but 15.8 percent lower quarter on quarter (QoQ) than the Rs 330.61 crore (16 percent of TIO).

“In a low growth and challenging business environment where growth rates in most consumer products segments remained under pressure, Dabur remains committed to delivering profitable growth. Even in these uncertain times, we have continued to report good growth across key categories and grow ahead of the market. We continue to invest behind our brands and are confident of our ability to report sustainable and profitable growth, going forward,” Dabur India Ltd Chief Executive Officer Sunil Duggal said.

Trends

The company’s ASP in Q1-2016 at Rs 330.61 crore (16 percent of TIO) was the highest in terms of actual rupee spends as well as in terms of percentage of TIO during the 12 quarter period starting Q3-2013 until Q2-2016. Over the 12 quarter period under consideration, Dabur’s ASP in absolute rupees and ASP in terms of percentage of TIO both show a linear increasing trend. Please refer to Fig 1 below.

Fig 1 below indicates that ASP in terms of percentage of TIO follows a linearly increasing zigzag line, with peaks in Q1 and Q3 and valleys in Q2 and Q4 of a financial year. Based on this, it is quite likely that the company’s ASP in Q3-2016 (next quarter) which is also a festival quarter in India, may be higher in terms of percentage of TIO.

Dabur’s TIO for the current quarter marked an 8.7 percent YoY growth at Rs 2,092.09 crore, up from Rs 1,924.09 crore and up 1.1 percent QoQ from Rs 2069.49. The company’s TIO shows a linear increasing trend during the twelve quarter period under consideration in this report.

Consolidated Net Profit for Q2 2016 reported an 18.7 percent YoY jump to Rs 341.1 crore (16.3 percent margin) as compared to Rs 287.48 crore (14.9 percent margin) and was 30.2 percent higher QoQ as compared to 262.10 crore (12.7 percent of TIO) .PAT in abslute rupees as well as in terms of percentage of TIO show linear increasing trends during the period under consideration in this report.

Category Growths

Dabur says thatits oral care business led by Dabur Red Paste and Meswak, continued to move forward on its strong growth trajectory and ended the quarter with a near 19 percent growth. The hair oils business also reported an over 14 percentgrowth during the quarter. The home care business ended the quarter with an over 12 percent growth, while the OTC & Ethicals business ended the period with a near 11 percent growth.

The quarter saw Dabur launch a number of new products and variants across geographies, all of which have received good response, the company says. During the quarter, Dabur extended the Hajmola brand to the beverage market with the launch of Hajmola Yoodley and also strengthened its presence in the professional skin care market with the launch of two new products under the OxyLife brand. In addition, the hair oil portfolio was expanded with the launch of Vatika Jasmine.

Dabur’s International Business recorded good growth during the second quarter, despite disturbances in key geographies.